Paramount Skydance has amended its bid to purchase Warner Bros. Discovery, adding a personal guarantee of funds from billionaire Larry Ellison. The newly amended bid, announced Monday, addresses concerns Warner Bros. expressed over Paramount’s initial offer.
Earlier this month, Paramount launched a $30-per-share, $108 billion hostile bid for Warner Bros., saying its offer was fully backed by Ellison’s family trust. However, on Wednesday, Warner’s board of directors sent a letter to shareholders, urging them to reject Paramount’s offer.
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The letter questioned Paramount’s claim that its offer was backed by the family. The company’s directors instead urged shareholders to accept an $83 billion deal with Netflix.
The new bid
Paramount’s amended offer seeks to resolve doubts about Larry Ellison’s personal stake in the deal. Ellison has an estimated net worth of $240 billion, making him the world’s fifth-richest person, according to Bloomberg Billionaires. His son, David, is Paramount’s chairman and chief executive.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount,” the company said in a statement.
The new bid notes that Warner Bros. never raised these concerns during 12 weeks of negotiations.
“WBD asserted that the full equity backstop from the Ellison family trust … was inadequate, despite the trust holding a majority of the assets of Larry Ellison, the founder of Oracle and controlling shareholder of Paramount,” Paramount wrote. “None of these concerns, nor the demand for a personal guarantee, were raised by WBD or its advisors to Paramount in the 12-week period leading up to WBD agreeing to the inferior transaction with Netflix, Inc.”
Paramount said it’s “publishing records confirming that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock and that all material liabilities of the Ellison family trust are publicly disclosed.”
Trump’s position
President Donald Trump has spoken favorably about Paramount’s hostile bid and has said he will take a direct role in approving any Warner Bros. Discovery deal. Larry Ellison is a longtime political supporter of Trump.
Federal approval will be required no matter which bid Warner Bros. shareholders accept. The Department of Justice and, potentially, the Federal Trade Commission will primarily focus on antitrust concerns.
Trump, however, has specifically focused on the future of CNN. The news network currently belongs to Warner Bros., but it and other cable networks would not be included in the Netflix deal. Paramount wants to purchase CNN as part of its offer.
Trump, who has frequently criticized the network’s coverage of his administration, told reporters that it’s “imperative that CNN be sold.”
“I don’t think the people that are running that company right now … should be allowed to continue,” Trump said.
However, has indicated he is also displeased with CBS News, now owned by the Ellisons’ Paramount.
“For those people that think I am close with the new owners of CBS,” he said in a social media post last week, “please understand that 60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before.”
